States in denial over job loss concerns

New Delhi: Even as job losses cause an alarm all over the country, state governments seem to not have a grip on the situation. While diamond industry hub Surat and garment manufacturing cluster Tirupur see people abandoning the cities for livelihoods somewhere else, state governments do not know the extent of job loss and the effect on their revenues.

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Indicus Analytics, a Delhi-based research firm, found in its interactions with various state governments that they are yet to implement any measures or to take a stock of the situation. The research firm also found that states that have more industrial clusters are hit more. Indicus Analytics’s director Laveesh Bhandari says the southern and western parts of India were hit more. These are the states that have more export-based industrial units. “The eastern and northern parts of India are doing better,” he says.

In the exports sector alone, India has already lost a million jobs since August this year. It could lose another half a million by end of the current fiscal, says the commerce secretary G K Pillai. The Federation of Indian Export Organisations holds that the situation could be far worse and has predicted loss of 10 million jobs by March. Exports have been on a steady decline since October 2008. The export target for fiscal ‘09 was fixed at $200 billion but now exports are only expected to touch $175 billion.

Even the Union budget presented on Monday did not do much to help the situation and did not announce any major employment schemes or aid.

The situation at the state level is only expected to get worse as states rush to raise revenues to meet fiscal deficits. This means that they will only be sucking much-needed liquidity out of the system. As exporters grapple with a slowing global and Indian economy, state apathy could well be the final blow.